Agenda

Monterey Peninsula Regional Water Authority (MPRWA)

Director's Meeting
7:00 PM, Thursday, January 12, 2017
Monterey Council Chambers
580 Pacific Street
Monterey, California

CALL TO ORDER
ROLL CALL
PLEDGE OF ALLEGIANCE
REPORTS FROM BOARD DIRECTORS AND STAFF
1.

1. Status of the MPWSP EIR/EIS Release and postponement of TAC review

2. Status of Authority contract with SPI (Geosyntec) for focused analysis of EIR/EIS
3. Status of MCWD and County applications to serve as Groundwater Sustainability
Agency (GSA) for the portions of the Salinas Valley Groundwater Basin
4. Status of Public Records Act request relative to the MPRWA
5. CPUC approved the Citizens for Just Water (CJW), incl. Rosemary Knight from Stanford
University, as an additional intervener in the MPWSP application
6. Status of the proposed amendment to the Large Settlement Agreement (LSA)
7. Status of Public Water Now's motion to withdraw from the LSA
PUBLIC COMMENTS
PUBLIC COMMENTS allows you, the public, to speak for a maximum of three minutes on any
subject which is within the jurisdiction of the MPRWA and which is not on the agenda. Any person
or group desiring to bring an item to the attention of the Authority may do so by addressing the
Authority during Public Comments or by addressing a letter of explanation to: MPRWA, Attn:
Monterey City Clerk, 580 Pacific St, Monterey, CA 93940. The appropriate staff person will contact
the sender concerning the details.

CONSENT AGENDA
CONSENT AGENDA consists of those items which are routine and for which a staff
recommendation has been prepared. A member of the public or MPRWA Director may request
that an item be placed on the regular agenda for further discussion

2.

Approve Minutes of Director's Meeting of November 10, and December 8, 2016 - Romero

3.

Approve and File Authority Checks Through December 31, 2016 - Romero
***End of Consent Agenda***

Thursday, January 12, 2017

AGENDA ITEMS
4.

Receive and Approve Annual Financial Report and a Full Opinion Audit for FY 2015-2016
from McGilloway, Ray, Brown and Kaufman CPA (Kaufman), and Provide Staff Direction Kaufman

5.

Receive Update, Discuss, and Provide Staff Direction on the Deep Water Desal Project
and the People's Moss Landing Desal Project - Project Representatives

6.

Receive an Update on the Summary Project Schedule for the Monterey Peninsula Water
Supply Project (MPWSP) and Status of Test Well Operation and Pipeline Construction Crooks
ADJOURNMENT

The City of Monterey is committed to including the disabled in all of its services, programs and
activities. In compliance with the Americans with Disabilities Act, if you need special assistance
to participate in this meeting, please contact the City Clerks Office at (831) 646-3935.
Notification 30 hours prior to the meeting will enable the City to make reasonable arrangements
to ensure accessibility to this meeting [28 CFR 35.102-35.104 ADA Title II]. Later requests will
be accommodated to the extent feasible. For communication-related assistance, dial 711 to use
the California Relay Service (CRS) to speak to City offices. CRS offers free text-to-speech, speechto-speech, and Spanish-language services 24 hours a day, 7 days a week. If you require a hearing
amplification device to attend a meeting, dial 711 to use CRS to talk to the City Clerk's Office at
(831) 646-3935 to coordinate use of a device.
Agenda related writings or documents provided to the MPRWA are available for public
inspection during the meeting or may be requested from the Monterey City Clerks Office at 580
Pacific St, Room 6, Monterey, CA 93940. This agenda is posted in compliance with California
Government Code Section 54954.2(a) or Section 54956.

M I N U TE S
MONTEREY PENINSULA REGIONAL WATER AUTHORITY (MPRWA)
Director's Meeting
7:00 PM, Thursday, November 10, 2016
COUNCIL CHAMBERS
580 PACIFIC STREET
MONTEREY, CALIFORNIA
Directors Present:

Director Dallas, Director Edelen, Director Pendergrass, Director Roberson,

President Kampe

Directors Absent:

Director Rubio

Staff Present:

Executive Director Cullem, Legal Counsel Damon, Clerk Romero

CALL TO ORDER
President Kampe called the meeting to order at 7:00pm.
ROLL CALL
PLEDGE OF ALLEGIANCE
REPORTS FROM BOARD DIRECTORS AND STAFF
Executive Director Cullem reported that the subcommittee for the Technical Advisory
Committee (TAC) is currently working on a revised draft of the Position Policy Statement. He
also reported that the TAC recommends that the Authority approve funding for Separation
Processes, Inc. (SPI) consultants to perform a review of the Environmental Impact Report (EIR)
for the Water Supply Project.
Executive Director Cullem introduced the frequently asked questions (FAQ's) that the Authority
has asked for California American Water (Cal Am) to address. He added that once Cal Am
responds the FAQ's will be posted on the MPRWA website to inform the public about the Water
Supply Project (WSP). President Kampe commented that numerous members of the public
have requested answers to questions about the WSP, and the Directors want the answers to
questions available to the public.
PUBLIC COMMENTS

Tom Rowley, representing Monterey Peninsula Taxpayers Association (MPTA),

commented that the Authoritys budget includes funds to have the EIR reviewed
independently. He suggested that the Authority and TAC receive a monthly update from
Deep Water Desal and the Peoples Desal Project to check on the progress and weigh
other options.

CONSENT AGENDA
President Kampe recommended that item #2 be continued because the check amounts are not
available. Director Edelen requested that items #3 and #4 be removed.

MPRWA Minutes

Thursday, November 10, 2016

On a motion by Director Pendergrass, seconded by Director Dallas, and carried by the following
vote, the Monterey Peninsula Regional Water Authority Approved Consent Agenda Items 1 & 5:
AYES:
NOES:
ABSENT:
ABSTAIN:
RECUSED:

5
0
1
0
0

DIRECTORS:
DIRECTORS:
DIRECTORS:
DIRECTORS:
DIRECTORS:

Dallas, Edelen, Pendergrass, Roberson, Kampe

None
Rubio
None
None

1.

Approve Minutes of Director's Meeting of September 8, 2016

Action: Approved

2.

Approve and File Authority Checks Through October 31, 2016

Action: Continued

3.

Receive Report on Notice from Public Water Now to Withdraw from the Settling Parties
Action: Received report; Discussed
Executive Director Cullem stated that Public Water Now (PWN) has withdrawn as one of the
parties from the settlement agreement. He added that PWN has an issue with the adequacy of
the test slant wells and therefore wish to pull out of the settlement agreement with the Water
Supply Project. He further stated that there may be a legal issue with PWN pulling out of the
agreement contract.
PUBLIC COMMENT

Tom Rowley, MPTA, said he is concerned that Public Water Now is grandstanding and
giving out misinformation to the public. He said we need community support and to get
out correct information.

John Narigi, Vice President of the Coalition of Monterey Peninsula Businesses, said that
the TAC was formed to support the Authority, and to aid in deciding which project to go
forward with and they chose the Cal Am project. He said that he doesn't know why
George Riley is on the TAC if he doesn't support the Cal Am Project. He said PWN has
a private agenda and a conflict of interest and voiced concern that the TAC is
continually answering the same questions over and over.

Director Edelen responded that Mr. Narigi makes a good point that some TAC members have
served their time on the board, and requested that the item be agendized to review the
members of the TAC.
President Kampe said since the settlement agreement is a contract, an issue was raised
regarding whether PWN could make exceptions to what they agreed to in the contract. He
added that it has been uncomfortable for the settling parties that PWN is not supporting aspects
of the settlement agreement, and could potentially be harming the WSP progress. He continued
that it has now become a legal issue whether PWN is able to withdraw from the contract. Legal
Counsel Damon said that for now PWN is still a settlement party, until a judge says otherwise
and it is unknown if that will happen. She added that as a signing party to the agreement, PWN
has an obligation to honor the terms of the agreement they signed.
Monterey Peninsula Regional Water Authority
Director's Meeting Minutes - Thursday, November 10, 2016
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MPRWA Minutes

Thursday, November 10, 2016

Director Edelen made a motion to review the members of the TAC at the next meeting.
On a motion by Director Edelen, seconded by Director Pendergrass, and carried by the
following vote, the Monterey Peninsula Regional Water Authority will review the composition
and the duties of the Members of the Technical Advisory Committee at a future meeting:
AYES:
NOES:
ABSENT:
ABSTAIN:
RECUSED:
4.

5
0
1
0
0

DIRECTORS:
DIRECTORS:
DIRECTORS:
DIRECTORS:
DIRECTORS:

Dallas, Edelen, Pendergrass, Roberson, Kampe

None
Rubio
None
None

Receive Report on the Marina Coast Water District Motion to Delay CPUC Hearings on the
Return Water Agreement and the Brine Disposal Agreement
Action: Received report; discussed
Executive Director Cullem reported that the next step California Public Utilities Commission
(CPUC) has denied the Marina Coast Water Districts (MCWD) motion to delay the CPUC
hearings. He said there is hope that the CPUC will go forward with hearings.
Director Edelen asked why MCWD wanted to delay the CPUC hearing. Executive Director
Cullem responded that he doesnt want to answer for the MCWD, but he believes it is related to
MCWD not wanting Cal Am drilling for water close to their source of ground water.
PUBLIC COMMENT
None
No action taken. Report was received and discussed.

5.

Receive Report on SWRCB Decision on Motion to Reconsider the CDO Extension (WR 20160016)
Action: Received report
***End of Consent Agenda***
AGENDA ITEMS

6.

Receive Report and Discuss the Overall Status of Water Supply on the Monterey Peninsula
Action: Received report; Discussed
Executive Director Cullem introduced Dave Stoldt who gave a presentation regarding the
overall status of the Water Supply Projects.

Monterey Peninsula Regional Water Authority

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MPRWA Minutes

Thursday, November 10, 2016

Dave Stoldts presentation gave an overview of the Water Supply Portfolio which includes
securing a water supply from various sources, including the Los Padres Dam/Carmel River,
Seaside Basin, Local Water Projects, Aquifer Storage and Recovery, Pure Water Monterey,
and the Desalination Project. He went over supply and demand and project sizing, breaking
down the amounts of water to be obtained from each source to meet the demand for water. He
gave a summary of Pure Water Monterey, explaining that it takes waste water from various
sources and through a purification process it produces drinkable water. He gave a breakdown
on the project status and added that it is expected to be completed and start delivering water in
March 2018.
Mr. Stoldt gave an update on the status of Pure Water Monterey. He summarized Cal Ams
proposed desalination project including the Monterey Pipeline and gave an update on the
progress of the project. He gave an update on Aquifer Storage and Recovery, and the updated
diversion limit on the Carmel River based on the revised Cease and Desist Order (CDO). He
also gave an overview of the milestones that have to be reached in order to meet the 1,000 AF
reduction from the Carmel River as a condition of the CDO.
Mr. Stoldt gave a brief overview of status of the various local water projects. He added that the
local supply projects add a buffer and diversifies the water supply portfolio.
PUBLIC COMMENT

Tom Rowley, MPTA, asked Dave Stoldt to explain where the ponds are the Del Monte
Golf Course.

Mr. Stoldt gave an explanation of why there has been a delay putting in a pond at the Del
Monte Golf Course due to the golf courses original historical plan.
7.

Receive Report, Discuss, and Provide Direction Concerning Proposed Amendments to the
Large Settlement Agreement
Action: Received Report; discussed
Executive Director Cullem explained that there have been changes made to the large
settlement agreement including updated financial statements, and if all 16 settling party agree
to the changes they will submit an amendment to the agreement. He said this will likely be done
in January 2017.
PUBLIC COMMENT
None

No action was taken on this item; the board received report and discussed.

Monterey Peninsula Regional Water Authority

Director's Meeting Minutes - Thursday, November 10, 2016
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MPRWA Minutes
8.

Thursday, November 10, 2016

Receive an Update on the Summary Project Schedule for the Monterey Peninsula Water
Supply Project (MPWSP)
Action: Received Report; discussed
Ian Crooks, Cal Am, gave a brief update on the MPWSP schedule and reported there have not
been any recent changes. He said that draft EIR for project comes out in December, and the
public comment period expires Feb. 4th. He reported that the Monterey Pipeline has begun
water line relocations and will continue through the beginning of January. He added that the 36
pipeline work will begin in December and is estimated to be completed by October 2017.
Director Edelen asked Mr. Crooks if fiberoptic cable could be installed underground so that the
roads don't have to be ripped up again. Mr. Crooks said Cal Am doesn't have the ability to do
this, but said perhaps a 3rd party could.
PUBLIC COMMENT

Tom Rowley, MPTA, said that he would like an update on the true cost of GWR.

President Kampe responded that by January 2017 an estimate on the cost of GWR should be
available.
Ian Crooks stated that the test slant wells have been reporting 93% salinity and expect the level
to be even better during production.
No action was taken on this item; the board received and discussed report.
ADJOURNMENT
Meeting adjourned at 8:11pm.

ATTEST:

Nova Romero, Authority Clerk, Clerk of the Authority

MPRWA President

Monterey Peninsula Regional Water Authority

Director's Meeting Minutes - Thursday, November 10, 2016
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M I N U TE S
MONTEREY PENINSULA REGIONAL WATER AUTHORITY (MPRWA)
Director's Meeting
7:00 PM, Thursday, December 8, 2016
COUNCIL CHAMBERS
580 PACIFIC STREET
MONTEREY, CALIFORNIA
Directors Present:
Directors Absent:

Director Dallas, Director Edelen, Director Roberson, Director Rubio,

President Kampe
Director Pendergrass

Staff Present:

Legal Counsel Freeman, Executive Director Cullem, Authority Clerk Romero

CALL TO ORDER
President Kampe called meeting to order at 7:00pm.
ROLL CALL
All Directors except Director Pendergrass were present.
PLEDGE OF ALLEGIANCE
REPORTS FROM BOARD DIRECTORS AND STAFF
President Kampe reported that at the Central Coast Regional Water Resources Control Board
meeting the discharge permit for Pacific Groves local water project was approved.
PUBLIC COMMENTS

Tom Rowley, Monterey Peninsula Taxpayers Association, said he was disappointed to

see the email regarding the delay of the Certificate of Public Convenience and
Necessity (CPCN) certification to June 2018 instead of Fall 2017. He remarked that the
only upshot of the delay is it will allow time for lawsuits to be settled. He said he is glad
there are funds set aside to review the Environmental Impact Report (EIR).

CONSENT AGENDA
1.

Approval of Minutes of Director's Meeting of November 10, 2016 - Romero

Action: Continued
Authority Clerk Romero requested that the Minutes of November 10, 2016, be continued to the
next meeting.

2.

Approve and File Authority Checks Through November 30, 2016 Romero
Action: Approved
Executive Director Cullem stated that the updated agenda report for item #2 shows the addition

MPRWA Minutes

Thursday, December 8, 2016

of an invoice for Cullem Services for Executive Director services in November.

President Kampe said that the approval process for Authority checks is carried out per the
policy and recognized that some Directors have requested more detailed invoices be made
available prior to approval.
On a motion by Director Edelen, seconded by Director Roberson, and carried by the following
vote, the Monterey Peninsula Regional Water Authority approved the consent agenda, with the
exception of item 1 which is continued:
AYES:
NOES:
ABSENT:
ABSTAIN:
RECUSED:

5
0
1
0
0

DIRECTORS:
DIRECTORS:
DIRECTORS:
DIRECTORS:
DIRECTORS:

Dallas, Edelen, Roberson, Rubio, Kampe

None
Pendergrass
None
None

3.

Receive Report on the Joint Motion to Oppose a Motion by Citizens for Just Water for
Intervening Party Status in the MPWSP Project - Cullem
Action: Received report

4.

Approve Contract Change Order with Separation Processes, Inc. to Conduct an Initial Technical
Review of Portions of the Re-circulated DEIR/DEIS at a Price Not-to-Exceed $10,000 - Cullem
Action: Approved Change Order
***End of Consent Agenda***
AGENDA ITEMS

5.

Receive Report, Discuss, and Provide Direction on Cal Am's Update to Frequently Asked
Questions - Stedman
Action: Received report; discussed; directed Staff to not post FAQs on MPRWA website
Executive Director Cullem explained that the Authority requested that California American
Water (Cal Am) provide responses to frequently asked questions (FAQs) of the public to post
on the MPRWA website. He added that the Technical Advisory Committee (TAC) reviewed
these FAQ's and responses, and suggested that any answers posted on the MPRWA website
should clearly state where the answers came from as well as allow other parties respond, such
as Marina Coast Water District.
Catherine Stedman, Cal Am, affirmed that she is available to answer questions regarding the
FAQ's. She added that what the Authority does with the FAQ's is their choice.
PUBLIC COMMENT:

George Riley, TAC Member, remarked that the way the FAQ's are answered will make it
difficult for the public to decipher whose viewpoint the answers are from. He added that
the TAC did not thoroughly go through each response and perhaps the recommendation
might have changed if they had.

Monterey Peninsula Regional Water Authority

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MPRWA Minutes

Thursday, December 8, 2016

Kampe thanked the TAC for their review of the FAQ's, and voiced agreement that the answers
from Cal Am should not be posted on the MPRWA website. He thanked Cal Am for providing
the answers to the questions as requested. He recalled someone saying in the past that the
Authority should provide "objective" answers to public questions. President Kampe remarked
that it would be hard to find an objective opinion and stated that regardless the review would be
attacked by the public, and added that controversial answers could result in lawsuits. He
remarked that the responses from Cal Am were well answered and supports the Water Supply
Project.
Director Edelen voiced agreement with most of the responses from Cal Am, especially those
related to Cal Ams project. He added that the FAQs should be posted on Cal Am's website
and suggested that a link be placed on the MPRWA site so the information is available to the
public without the Authority being blamed for any misinterpretation.
President Kampe summarized that the consensus of the Authority is to not post the FAQ
responses from Cal Am on the MPRWA website. He thanked Cal Am for taking time to provide
the responses as requested.
6.

Receive an Update on the Summary Project Schedule for the Monterey Peninsula Water
Supply Project (MPWSP) in Light of the CPUC Decision to Delay the CPCN - Crooks
Action: Received update
Ian Crooks, Cal Am, gave an update on the MPWSP schedule. He said that due to the
California Public Utilities Commissions (CPUC) process he doesnt see the Environmental
Impact Report (EIR) as being delayed.
PUBLIC COMMENT:

Tom Rowley, MPTA, said that any delays to the EIR is concerning to taxpayers even if it
doesnt affect Cal Am. He said he does not plan to read the whole EIR, but said that the
outside review of it is vital.

Update received. No action was taken on this item.

7.

Receive Report, and Approve Changes to the Water Authority Policy Position Statement Cullem
Action: Received report; made changes to Policy Position Statement
Executive Director Cullem explained that the TAC reviewed the Policy Position Statement (the
Policy) and made suggestions to revise the policy.
PUBLIC COMMENT:

Tom Rowley, MPTA, said that the Policy doesn't say when the Authoritys job is done
and has reached its mission. He added that there is a lawsuit against the water district in
case they run out of water and said he hopes there will be an update from the other
water projects.
Monterey Peninsula Regional Water Authority
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MPRWA Minutes

Thursday, December 8, 2016

Director Rubio suggested the whole paragraph on the second page of the policy not be
removed, but instead shortened.
Director Roberson said that hes comfortable with the revised policy from the TAC the way it is,
and added that the policy should be just to get the water and not put future goals beyond that
because it becomes political. President Kampe said that the policy focus is to get a water
supply project and not address future involvement with the water management district too far in
advance.
On a motion by Director Kampe, seconded by Director Roberson, and carried by the following
vote, the Monterey Peninsula Regional Water Authority Approved Changes to the Water
Authority Policy Position Statement made by the Technical Advisory Committee (TAC):
AYES:
NOES:
ABSENT:
ABSTAIN:
RECUSED:
8.

4
1
1
0
0

DIRECTORS:
DIRECTORS:
DIRECTORS:
DIRECTORS:
DIRECTORS:

Dallas, Edelen, Roberson, Kampe

Rubio
Pendergrass
None
None

Receive Report, Discuss, and Provide Direction on the Water Authority Work Plan and on the
Composition and Role of the Technical Advisory Committee (TAC) for CY 2017 - Cullem
Action: Received report; discussed; will continue discussion at a future meeting
Executive Cullem said that prioritized Authority Work Plan was recently updated by President
Kampe and suggested it may be time for the Authority to discuss the meeting frequency, timing,
composition, tasks, and focus of the Technical Advisory Committee (TAC).
PUBLIC COMMENT:

Tom Rowley, MPTA, said that the Authority and the TAC started out by helping and
expediting the project forward and getting the ball rolling. He said he has attended
almost every meeting of the TAC, and there should be a review once a year and open
up positions to the public. He added there are some members of the TAC who have
served long time have provided the Authority with good advice. He said the TAC should
review the other water supply projects besides Cal Am to consider backup projects.

George Riley, TAC member, said that some members of the TAC will be responding
independently to the EIR, such as the Marina Coast Water District Manager.

Director Rubio said that it may be worthwhile to agendize a closer look at the TAC and what
options are available to improve it. He said he'd like to know what the basic requirements to be
on the TAC, such as having specific expertise.
Director Roberson said that recently Dave Stoldt gave a great presentation on the state of the
water project. He said that the Authority budget is a concern and suggested that the TAC
should be a resource and not necessarily meet monthly. He said that a standing committee
sometimes creates meetings when not needed.
Monterey Peninsula Regional Water Authority
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MPRWA Minutes

Thursday, December 8, 2016

President Kampe said its important to make the best use of everyones time. He added that ad
hoc bodies that only pop up when needed are hard to rally when you need them. He
commented that the TAC should have a say in how many members and meetings are needed
as well as the criteria for board members and their role as an advisory body.
Executive Director Cullem agreed that the TAC should evaluate their mission and makeup. He
said that having the General Manager of the Marina Coast Water District adds valuable input as
a non-Cal Am customer. He pointed out that when you don't have regular TAC meetings, there
is trouble getting video recording, Clerk, and meeting facility together on short notice. He also
said there needs to be transparency to inform the public, and that the technical discussion is
taken care of by the TAC so that the Authority doesn't have to spend the time on it. He also
stated that the TAC meetings are cancelled when there are not enough items to discuss and
about 1 out of every 3 meetings are canceled.
President Kampe agreed that transparency is important and good for the public, and there is
also the need to have reliable facilities, staff and video recording. He summarized that the
consensus of the Authority is that that there should be future discussion regarding the number
of the TAC members, qualifications, scope, and to identify any gaps that exist.
ADJOURNMENT
President Kampe adjourned the meeting at 7:52pm

ATTEST:

Nova Romero, Clerk of the Authority

MPRWA President

Monterey Peninsula Regional Water Authority

Director's Meeting Minutes - Thursday, December 8, 2016
5

Monterey Peninsula Regional Water Authority

Agenda Report

FROM:

Date: January 12, 2017

Item No: 3.

Executive Director Cullem

SUBJECT: Approve and File Authority Checks Through December 31, 2016 - Romero
RECOMMENDATION:
It is recommended that the Authority approve and file the accounts payable payments
made during the period December 1, 2016 through December 31, 2016 with total
payments for the above referenced period of $19,545.00 from the general fund account
and authorize the Directors to sign for such checks.
DISCUSSION:
At its meeting on September 12, 2013, the Authority Board approved a staff
recommendation to provide the Directors a listing of financial obligations since the last
report for inspection and confirmation. Each invoiced expense has been reviewed and
approved by the Executive Director and Finance personnel prior to payment to insure that
it conforms to the approved budget.
The following checks are hereby submitted to the Authority for inspection and
confirmation:

$8,750 to City of Monterey for financial and clerk services July-Sept 2016

$5,395 to Cullem Management Services for November 2016

$2,500 to Don Freeman for January 2017 retainer

$2,500 to Don Freeman for December 2016 retainer

$400 to AMP for November 2016 services

The bank balances as of December 31, 2017 is sufficient cover the above checks
therefore, staff is recommending approval.

ATTACHMENTS:
None

Monterey Peninsula Regional Water

Authority
Agenda Report

Date: January 12, 2017

Item No: 4.

FROM:

Executive Director Cullem

SUBJECT:

Receive and Approve Annual Financial Report and a Full Opinion Audit for FY
2015-2016 from McGilloway, Ray, Brown and Kaufman CPA (Kaufman), and
Provide Direction to Staff

RECOMMENDATION:
It is recommended that the MPRWA receive and approve the written audit for Fiscal Year 20152016 as well as a verbal presentation by Kaufman, and provide staff direction.
DISCUSSION:
Following an informal solicitation for proposals in 2013, the Executive Director selected
Kaufman for the FY 2012-2014 audits. The Water Authority was briefed on the selection at its
meeting of October 10th. The contract was executed on October 31, 2013.
On February 13, 2014, the Water Authority approved a modification and contract extension for
the completion of the FY 2013-2014 audit.
Kaufman now has extensive experience with the Authoritys financial system, has done an
excellent job in conducting the audits, and has provided direction and guidance that has greatly
improved the Authority's system of financial accountability. Accordingly, on January 10, 2015
the Authority extended the contract for the FY 2014-2015 audit and on January 14, 2016
extended the contract for FY 2015-2016 and FY 2016-2017 audits.
The FY 2015-2016 audit results were presented to the Authority Finance Committee on
January 9, 2016. The committee voted that the Water Authority Board should receive the full FY
2015-2016 audit presentation and approve the audit report as amended at the committee
meeting. The audit documents to be provided to the Board include the amendments.
FISCAL IMPACTS:
As authorized by the Water Authority Board, Kaufman is now contracted to complete the FY
2015-2016 and FY 2016-2017 audits at a price not-to-exceed $7500 and $8000 respectively,
inclusive of the Management Discussion and Analysis (MD&A).
ATTACHMENTS:
1.

2016 Audit Governance Letter

2. Financial Statements with Independent Auditors Report FY June 30, 2016

06/12

McGILLOWAY, RAY, BROWN & KAUFMAN

Accountants & Consultants
2511 Garden Road, Suite A180
Monterey, CA 93940-5301
831-373-3337
Fax 831-373-3437

379 West Market Street

Salinas, CA 93901
831-424-2737
Fax 831-424-7936

Board of Directors and Management of

Monterey Peninsula Regional Water Authority
Monterey, California
We have audited the financial statements of Monterey Peninsula Regional Water Authority for the
year ended June 30, 2016. Professional standards require that we provide you with information
about our responsibilities under generally accepted auditing standards, as well as certain
information related to the planned scope and timing of our audit. We have communicated such
information in our letter to you dated December 4, 2015. Professional standards also require that
we communicate to you the following information related to our audit.
Significant Audit Findings
Qualitative Aspects of Accounting Practices
Management is responsible for the selection and use of appropriate accounting policies. The
significant accounting policies used by Monterey Peninsula Regional Water Authority are
described in Note 1 to the financial statements. No new accounting policies were adopted and the
application of existing policies was not changed during the fiscal year June 30, 2016. We noted
no transactions entered into by Monterey Peninsula Regional Water Authority during the year for
which there is a lack of authoritative guidance or consensus. All significant transactions have been
recognized in the financial statements in the proper period.
Accounting estimates are an integral part of the financial statements prepared by management and
are based on managements knowledge and experience about past and current events and
assumptions about future events. Certain accounting estimates are particularly sensitive because
of their significance to the financial statements and because of the possibility that future events
affecting them may differ significantly from those expected. The most sensitive estimate affecting
the Authoritys financial statements was:
Managements estimate for the allowance of doubtful accounts receivable is zero. This
decision is based on managements assumptions and historical experience with
collection of membership fees, and these assumptions appear reasonable.
The financial statement disclosures are neutral, consistent, and clear.
Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with management in performing and
completing our audit.

Daniel M. McGilloway, Jr., CPA, CVA, Gerald C. Ray, CPA, Clyde W. Brown, CPA, Patricia M. Kaufman, CPA,
Larry W. Rollins, CPA, Jesus Montemayor, CPA

Sarita C. Shannon, CPA, Whitney Ernest, CPA, Devvyn MacBeth, CPA,

Smriti Shrestha, CPA, Wei Ding, CPA

Corrected and Uncorrected Misstatements

Professional standards require us to accumulate all known and likely misstatements identified
during the audit, other than those that are clearly trivial, and communicate them to the appropriate
level of management. Management has corrected all such misstatements, see attached Adjusting
Journal Entries. In addition, none of the misstatements detected as a result of audit procedures and
corrected by management were material, either individually or in the aggregate, to each opinion
units financial statements taken as a whole.
Disagreements with Management
For purposes of this letter, a disagreement with management is a financial accounting, reporting,
or auditing matter, whether or not resolved to our satisfaction, that could be significant to the
financial statements or the auditors report. We are pleased to report that no such disagreements
arose during the course of our audit.
Management Representations
We have requested certain representations from management that are included in the management
representation letter dated December 27, 2016.
Management Consultations with Other Independent Accountants
In some cases, management may decide to consult with other accountants about auditing and
accounting matters, similar to obtaining a second opinion on certain situations. If a consultation
involves application of an accounting principle to Monterey Peninsula Regional Water Authoritys
financial statements or a determination of the type of auditors opinion that may be expressed on
those statements, our professional standards require the consulting accountant to check with us to
determine that the consultant has all the relevant facts. To our knowledge, there were no such
consultations with other accountants.
Other Audit Findings or Issues
We generally discuss a variety of matters, including the application of accounting principles and
auditing standards, with management each year prior to retention as Monterey Peninsula Regional
Water Authoritys auditors. However, these discussions occurred in the normal course of our
professional relationship and our responses were not a condition to our retention.
Restriction on Use
This information is intended solely for the use of Board of Directors and Management of Monterey
Peninsula Regional Water Authority and is not intended to be, and should not be, used by anyone
other than these specified parties.

McGilloway, Ray, Brown & Kaufman

Salinas, California
December 27, 2016

Client:
Engagement:
Period Ending:
Trial Balance:
Workpaper:
Account

Description

Adjusting Journal Entries JE # 1

To correct AP balance
2020
5030

W/P Ref

Debit

Accounts Payable
Special Counsel

16,762.00
16,762.00

Adjusting Journal Entries JE # 2

To correct WFB Engineering close
7000
1010

15,051.00

Total

15,051.00

3200
2100

Retained Earnings
Deferred Revenue

16,762.00
16,762.00

A-02

Return of Refund
Wells Fargo - Engineering

Adjusting Journal Entries JE # 3

To correct Deferred Revenue Previously reported in FY 14-15

Credit

N-01

Total

Total

12/13/2016
4:05 PM

215313 - Monterey Peninsula Regional Water Authority

215313 A - Monterey Peninsula Regional Water Authority
6/30/2016
1.05 - Trial Balance Database
1.07 - Adjusting Journal Entries Report

15,051.00
15,051.00

N-10
1,121.00
1,121.00

1,121.00
1,121.00

1 of 1

MONTEREY PENINSULA REGIONAL

WATER AUTHORITY
FINANCIAL STATEMENTS
with
INDEPENDENT AUDITORS REPORT
YEAR ENDED JUNE 30, 2016

MCGILLOWAY, RAY, BROWN & KAUFMAN

ACCOUNTANTS & CONSULTANTS

TABLE OF CONTENTS
Page
Independent Auditors Report

Managements Discussion and Analysis

(Required Supplementary Information)

Basic Financial statements

Statement of Net Position
Statement of Revenues, Expenses and Changes in Net Position
Statement of Cash Flows
Notes to Financial Statements

7
8
9
10

McGILLOWAY, RAY, BROWN & KAUFMAN

Accountants & Consultants
2511 Garden Road, Suite A180
Monterey, CA 93940-5301
831-373-3337
Fax 831-373-3437

379 West Market Street

Salinas, CA 93901
831-424-2737
Fax 831-424-7936

INDEPENDENT AUDITOR'S REPORT

The Board of Directors
of Monterey Peninsula Regional Water Authority
Monterey, California
We have audited the accompanying financial statements of the Monterey Peninsula Regional
Water Authority (the Authority), as of and for the year ended June 30, 2016, and the related
notes to the financial statements, which collectively comprise the Authoritys basic financial
statements as listed in the table of contents.
Managements Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements
in accordance with accounting principles generally accepted in the United States of America; this
includes the design, implementation, and maintenance of internal control relevant to the
preparation and fair presentation of financial statements that are free from material misstatement,
whether due to fraud or error.
Auditors Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We
conducted our audit in accordance with auditing standards generally accepted in the United States
of America. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditors judgment,
including the assessment of the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor considers internal control
relevant to the entitys preparation and fair presentation of the financial statements in order to
design audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the entitys internal control. Accordingly, we express
no such opinion. An audit also includes evaluating the appropriateness of accounting policies used
and the reasonableness of significant accounting estimates made by management, as well as
evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinion.
Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects,
the financial position of the Monterey Peninsula Regional Water Authority as of June 30, 2016
and the changes in its financial position and its cash flows for the year then ended, in accordance
with accounting principles generally accepted in the United States of America.
Daniel M. McGilloway, Jr., CPA, CVA, Gerald C. Ray, CPA, Clyde W. Brown, CPA, Patricia M. Kaufman, CPA,
Larry W. Rollins, CPA, Jesus Montemayor, CPA

Sarita C. Shannon, CPA, Whitney Ernest, CPA, Devvyn MacBeth, CPA,

Smriti Shrestha, CPA, Wei Ding, CPA

Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
managements discussion and analysis on pages 3 through 6 be presented to supplement the basic
financial statements. Such information, although not a part of the basic financial statements, is
required by the Governmental Accounting Standards Board, who considers it to be an essential
part of financial reporting for placing the basic financial statements in an appropriate operational,
economic, or historical context. We have applied certain limited procedures to the required
supplementary information in accordance with auditing standards generally accepted in the
United States of America, which consisted of inquiries of management about the methods of
preparing the information and comparing the information for consistency with managements
responses to our inquiries, the basic financial statements, and other knowledge we obtained
during our audit of the basic financial statements. We do not express an opinion or provide any
assurance on the information because the limited procedures do not provide us with sufficient
evidence to express an opinion or provide any assurance.

McGilloway, Ray, Brown & Kaufman

Salinas, California
December 27, 2016

MONTEREY PENINSULA REGIONAL WATER AUTHORITY

MANAGEMENTS DISCUSSION AND ANALYSIS
JUNE 30, 2016
This section of the Authoritys annual financial report presents our discussion and analysis of the
Authoritys financial position and changes in financial position as of and for the fiscal year
ended June 30, 2016. The Managements Discussion and Analysis (MD&A) should be read in
conjunction with the Authoritys basic financial statements and the related notes to the financial
statements, which immediately follow this section.
Financial Highlights

Operating revenues decrease by $603,833 to $137,000 or -81.5%, primarily due to the

utilization of previous year-end balances to reduce the member contributions for FY 1516 as well as an end to Cal-Am revenues contributed to the Value Engineering account.

Operating expenses decreased by $158,225 to $371,745 or -29.9%, primarily due to

reduced expenditures in the Value Engineering account.

Total assets decreased by $315,942 to $98,607 or -76.2% primarily due to utilization of

the Value Engineering funds, reduction in member contributions, and utilization of
reserve funds for additional work under the Special Counsel and SPI contracts.

Total liabilities decrease by $81,197 to $1,121 or -98.6% primarily due to closure of the
Value Engineering account and return of remaining funds to Cal-Am.

The Authoritys net position decreased by $234,745 to $97,486 or -70.7% as a result of

current year operations.

Using This Annual Report

This annual report consists of three sections: Managements Discussion and Analysis; Financial
Statements; and Notes to Basic Financial Statements, that explain in more detail some of the
information in the Financial Statements.
Required Financial Statements
The Statement of Net Position includes the Authoritys assets and liabilities and provides
information about the nature and amounts of investments in resources (assets) and nature and
extent of obligations (liabilities) with the difference between them being reported as net position.
It also provides the basis for computing the rates of return, evaluating the capital structure of the
Authority, and assessing the liquidity and financial flexibility of the Authority.
The Statement of Revenues, Expenses, and Changes in Net Position presents the changes in net
position from one reporting period to another by accounting for revenues and expenses and
measuring the financial results of operations. This statement measures the profitability of the
Authoritys operations over the past year and can be used to determine whether the Authority has
successfully recovered all of its costs through its user fees and other charges.
The Statement of Cash Flows provides information about the Authoritys cash receipts, cash
payments, and net changes in cash and cash equivalents resulting from operating, investing, and
capital and non-capital financing activities. It also provides information regarding sources of
cash, uses of cash, and changes in cash balances during the reporting period.
Notes to the financial statements include information essential to understanding the above
statements, such as the Authoritys significant accounting policies and information about certain
financial statement account.

MONTEREY PENINSULA REGIONAL WATER AUTHORITY

MANAGEMENTS DISCUSSION AND ANALYSIS
JUNE 30, 2016
Authoritys Financial Analysis
Net Position
A summary of the Authoritys Condensed Statement of Net Position is presented in Table 1
below.
Net Position may serve over time as an indicator of an Authoritys financial position. In the case
of this Authority, assets exceeded liabilities by $97,486 as of June 30, 2016.
The Authoritys current financial position is the product of the net result of revenues and
expenses.
Table 1
CONDENSED STATEMENT OF NET POSITION
Year ended June 30,
2016
2015

Change

Amount

Percent

ASSETS
Cash and cash equivalents
Accounts receivable
Prepaid expense

Total assets

7,947
88,160
2,500

$ 414,549
-

$ (406,602)
88,160
2,500

-98.1%
100.0%
100.0%

98,607

414,549

(315,942)

-76.2%

1,121

81,197
1,121

(81,197)
-

-100.0%
0.0%

1,121

82,318

(81,197)

-98.6%

97,486

332,231

(234,745)

-70.7%

97,486

$ 332,231

$ (234,745)

-70.7%

LIABILITIES
Accounts payable
Unearned revenue
Total liabilities
NET POSITION
Unrestricted
Total net position

Changes in Net Position

The following table represents a summary of the Statement of Revenues, Expenses and Changes
in Net Position.
Table 2
CONDENSED STATEMENT OF REVENUES, EXPENSES AND
CHANGES IN NET POSITION

Operating revenues

Year ended June 30,

2016
2015
$ 137,000
$ 740,833

Amount
$ (603,833)

Percent
-81.5%

Operating expenses
Change in net position

371,745
$ (234,745)

(158,225)
$ (445,608)

-29.9%
-211.3%

529,970
$ 210,863

Change

MONTEREY PENINSULA REGIONAL WATER AUTHORITY

MANAGEMENTS DISCUSSION AND ANALYSIS
JUNE 30, 2016
Budget
The Authoritys governing body adopted a budget as an operating plan. Budgetary basis financial
statements are not presented because there is no legal requirement to do so.
On May 14, 2015, the Authority adopted a budget of $290,000 for the fiscal year ended June 30,
2016, with fair-share contributions requested from each member city as well as from Monterey
County. The budget was subsequently increased on May 12, 2016 to $420,000. The increase
was for additional legal services under our Special Counsel contract as well as additional
technical work under our SPI contract for responses to the Draft Environmental Impact Report
(DEIR) of the Monterey Peninsula Water Supply Project (MPWSP).
Factors Bearing on the Authoritys Future
During fiscal year ended June 30, 2016, the focus of the Authority remained on keeping the
Community united in seeking water supply projects that could come as close as possible to the
Cease and Desist Order (CDO) 2009-0060 deadline of January 1, 2017, and in obtaining State
Water Resources Control Board (SWRCB) approval of a 5-year extension of that deadline. The
extension was requested based on the fact that delays in the MPWSP were due to circumstances
beyond the control of Cal-Am or the community. In particular, the Authority focused on efforts
to obtain regulatory approvals and permits for Cal-Am's MPWSP, and the Pollution Control
Agency Ground Water Replenishment (GWR) project which has moved forward more quickly
than the Desal project. The Authority will be focused on the success of the GWR project in light
of the fact that GWR is now identified as an early milestone condition in the revised CDO. The
Authority continued to provide transparency in its deliberations, insuring accountable elected
officials retain oversight of new water supply projects for the Peninsula, maximizing public
participation, and retaining a policy position that best served the needs of Peninsula residents.
The Position Statement, which will be updated in FY 16-17, also defined basic conditions that
any project must satisfy to receive Authority support. After intense analysis and public
discussion of the Desal options available, the Authority voted to support Cal-Ams MPWSP.
The future of the Water Authority depends upon how successful it can be in keeping the six
Peninsula cities and Monterey County working together, focused on those components of the
portfolio water solution which comply with the basic conditions of its updated Position
Statement.
To that end, the Authority again approved a work plan for the upcoming fiscal year which
includes:
Completion of post-settlement activities and follow-up with settling parties regarding CalAms CPUC application for the MPWSP with the objective of Cal-Am receiving a
Certificate for Public Convenience and Necessity (CPCN) by February 2018
Work collaboratively with MPWSP and Cal-Am to obtain Water Rate Relief Bonding and
other public funding to minimize costs to the ratepayer
Assist in the timely review of the re-circulated DEIR/DEIS due out December 2016
Continue to strongly support the Monterey Peninsula Water Management District
(MPWMD) and Monterey Regional Water Pollution Control Agency to move the GWR
project forward
Work with the MPWMD to insure that Cal-Am and the community satisfy the
requirements and milestones in the amended CDO
5

MONTEREY PENINSULA REGIONAL WATER AUTHORITY

MANAGEMENTS DISCUSSION AND ANALYSIS
JUNE 30, 2016
Support Cal-Am in its effort to secure permits related to the MPWSP
Pursue opportunities to increase the use of storm water in future water supply projects
Request for Information
This financial report is designed to provide citizens and taxpayers with a general overview of the
Authoritys finances and to demonstrate the Authoritys accountability for money it receives. If
you have any questions about this report or need any additional information, please contact the
Authoritys Executive Director, James Cullem, via telephone at 831-241-8503, or email at
j.ecull@comcast.net.

MONTEREY PENINSULA REGIONAL WATER AUTHORITY

STATEMENT OF NET POSITION
JUNE 30, 2016

ASSETS
Cash and cash equivalents
Accounts receivable
Prepaid expense

Total assets

7,947
88,160
2,500
98,607

LIABILITIES
Unearned revenue

1,121

Total liabilities

1,121

NET POSITION
Unrestricted
Total net position

The accompanying notes are an integral part of these financial statements.

7

97,486
97,486

MONTEREY PENINSULA REGIONAL WATER AUTHORITY

STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
FOR THE YEAR ENDED JUNE 30, 2016

OPERATING REVENUES
Membership fees

Total operating revenue

137,000
137,000

OPERATING EXPENSES
Administration and clerical services
Legal services
Contract services
Insurance
Travel expense
Project reimbursement fund

106,633
197,132
44,936
6,428
1,564
15,052

Total operating expenses

371,745

Operating income/change in net position

(234,745)

Net position, beginning of year

Net position, end of year

332,231
$

The accompanying notes are an integral part of these financial statements.

8

97,486

MONTEREY PENINSULA REGIONAL WATER AUTHORITY

STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 2016

Cash Flows from Operating Activities

Cash received from membership fees
Cash payments to consultants and suppliers
of goods and services

(455,442)

Net cash provided (used) by operating activities

(318,442)

Net decrease in cash and cash equivalents

(318,442)

Cash and cash equivalents, beginning of year

Cash and cash equivalents, end of year
Reconciliation of operating income to net cash
provided (used) by operating activities
Operating income (loss)
Adjustments to reconcile operating income to net cash
provided (used) by operating activities
Provision for allowance of doubtful accounts
(Increase) decrease in accounts receivables
(Increase) decrease in prepaid expense
Increase (decrease) in accounts payable
Net cash provided (used) by operating activities

137,000

414,549
$

96,107

(234,745)

(134,719)
46,559
(2,500)
(81,197)
$

The accompanying notes are an integral part of these financial statements.

9

(406,602)

MONTEREY PENINSULA REGIONAL WATER AUTHORITY

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2016
1. Organization and Summary of Significant Accounting Polices
Organization
The Monterey Peninsula Regional Water Authority (the Authority) was formed on February
25, 2012, pursuant to the Joint Exercise of Powers Act, set forth in Chapter 5 of Division 7 of
Title 1 of the Government Code, sections 6500, et seq. The Authority operates as a jointly
governed organization. The participants of the Authority are the cities of Carmel-by-the-Sea,
Del Rey Oaks, Monterey, Pacific Grove, Sand City, Seaside, and the County of Monterey. The
Authority operates under a governing body of seven directors, one director from each participant.
The purpose of the Authority is to jointly ensure the timely development, financing, construction,
operation, repair, and maintenance of one or more water projects and ensure that the governance
of such water projects includes representation that is directly accountable to the participants
water uses.
Basis of Accounting, Financial Presentation, and Measurement Focus
The Authoritys basic financial statements have been prepared using the accrual basis of
accounting.
As such, revenue is recognized when earned, and expenses are recognized when they are
incurred.
The Authority reports its activities as a single enterprise fund, which is used to account for
operations that are financed and operated in a manner similar to a private business enterprise.
An enterprise fund distinguishes operating revenues and expenses from non-operating items.
Operating revenues and expenses generally result from providing services and producing and
delivering goods in connection with the proprietarys fund principal ongoing operations. The
principle operating revenue for the Authority is membership fees from the Authoritys seven
member agencies. Operating expenses for the Authority include the cost of services, and
administrative expenses. All revenues and expenses not meeting this definition are reported as
non-operating revenues and expenses.
The basic financial statements are prepared using an economic resources measurement focus.
This means all assets and liabilities associated with the Authoritys activities are included on the
Statement of Net Position. The Statement of Revenues, Expenses and Changes in Net Position
presents increases (revenues) and decreases (expenses) to total net position.
Accounting Changes
The Authority applies all applicable GASB pronouncements for certain accounting and financial
reporting guidance.
Budget
The Authority annually adopts an operating budget for the ensuing fiscal year effective July 1
with a mid-year review as a financial plan for the year. The governing body adopts said budget
as an operating plan. Budgetary basis financial statements are not presented because the
Authority is not legally required to do so.
Cash and Cash Equivalents
The Authority presents its cash flow statements using the direct method. For purposes of cash
flow presentation, the Authority considers demand deposits with financial institutions to be cash
equivalents.

10

MONTEREY PENINSULA REGIONAL WATER AUTHORITY

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2016
Accounts Receivable
The primary source of accounts receivable is from membership fees paid annually by the six
member agencies. No allowance is established for membership fees as management considers
them fully collectible. As of June 30, 2016, the Authority had one outstanding receivable in the
amount of $88,160 from the County of Monterey.
Prepaid Expenses
Certain payments to vendors reflect costs applicable to future accounting periods and are
recorded as prepaid expenses. As of June 30, 2016 the Authority had a prepaid balance of
$2,500 for legal expenses.
Deferred Outflows/Inflows of Resources
In addition to assets, the statement of financial position will sometimes report a separate section
for deferred outflows of resources. This separate financial statement element, deferred outflows
of resources, represents a consumption of net position that applies to a future period(s) and so
will not be recognized as an outflow of resources (expenses) until then. For this reporting
period, the Authority has no items that qualify for reporting in this category.
In addition to liabilities, the statement of net position will sometimes report a separate section for
deferred inflows of resources. This separate financial statement element, deferred inflows of
resources, represents an acquisition of net position that applies to a future period(s) and so will
not be recognized as an inflow of resources (revenue) until that time. For this reporting period,
the Authority has no items that qualify for reporting in this category.
Net Position
The statement of net position reports all financial and capital resources. The difference between
assets and liabilities is net position. The Authoritys net position is classified as follows:
Net Investment in Capital Assets This represents the total investment in capital assets, net of
outstanding debt obligations related to those capital assets. Currently, the Authority does not
have any capital assets or outstanding debt.
Restricted Net Position This represents amounts that are subject to restrictions that are imposed
by external groups such as creditors, contributors or laws and regulations of other governments
or law through constitutional provisions or enabling legislation. Currently, the Authority does
not have any restrictions on net position.
Unrestricted Net Position Unrestricted net position includes resources derived from
membership fees.
Revenue Recognition
Revenues are recognized when earned. Revenues for the Authority are recognized when billed
to each of the seven member agencies.
Use of Estimates
Management uses estimates and assumptions in preparing financial statements in accordance
with generally accepted accounting principles. Those estimates and assumptions affect the
reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues and expenses during the
reporting period. Accordingly, actual results may differ from these estimates.

11

MONTEREY PENINSULA REGIONAL WATER AUTHORITY

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2016
2. Cash Held with Financial Institutions
The Authority maintains cash balances at Wells Fargo Bank, N.A, a commercial bank with
branches in Carmel-by-the-Sea, CA with federal depository insurance coverage of $250,000. In
accordance with the applicable federal law and state statutory requirements, public funds are
collateralized for balances above FDIC coverage.
3. Related Parties
The Authority currently contracts out for administrative and clerical services and executive
director services. The administrative and clerical services contract, between the Authority and
the City of Seaside, states that the Authority is contractually obligated to pay the City of Seaside
for administrative and clerical services with an annual payment rendered at the beginning of each
fiscal year. For the fiscal year ended June 30, 2016, a fee of $35,000 was paid to the City of
Seaside for administrative and clerical services.
The executive director services contract, between the Authority and the City of Monterey, states
the Authority is liable for all services rendered to the Authority by the Executive Director and
fees are to be paid on a monthly basis. For the fiscal year ended June 30, 2016, $71,415 was
paid to the City of Monterey for executive director services.
These contracts are in place to provide the Authority with all necessary services that would
otherwise be handled by an operational staff. As such, the Authority does not retain a staff to
fulfill these duties and does not have payroll or any other related liabilities.
As of July 1, 2016, the City of Monterey has taken over the administrative and clerical services.
4. Risk Management
The Authority is exposed to various risks of loss related to torts, theft of, damage to, or
destruction of assets; errors and omissions; injuries to employees; employee health claims;
unemployment compensation claims and environmental damage for which the Authority
purchases commercial insurance. There has been no reduction in insurance coverage from the
prior year. Insurance settlements for claims resulting from the risks covered by commercial
insurance have not exceeded the insurance coverage in the past year. The Authority has obtained
coverage from commercial insurance companies.
5. Subsequent Events
Management has performed an analysis of the activities and transactions subsequent to June 30,
2016, to determine the need for any adjustments to and/or disclosures within the audited
financial statements for the year ended June 30, 2016. Management has performed their analysis
through December 27, 2016, the date the financial statements were available to be issued. No
subsequent events as defined by the standard were found.
Subsequent events were evaluated through December 27, 2016, which is the date the financial
statements were available to be issued.

12

Monterey Peninsula Regional Water Authority

Agenda Report

Date: January 12, 2017

Item No: 5.

FROM:

Executive Director Cullem

SUBJECT:

Receive Update, Discuss, and Provide Staff Direction on the Deep

Water Desal Project and the People's Moss Landing Desal Project

RECOMMENDATION:
It is recommended that the Board of the Monterey Peninsula Regional Water Authority
(MPRWA) receive an update on the proposed Deep Water Desal (DWD) Project and
the People's Moss Landing Desal (PML) Project and provide staff direction.
DISCUSSION:
On August 11, 2016, Both DWD and PML provided full presentations on the status of
their respective projects. Since the Water Authority has requested more frequent
information on these two alternative desal projects, representatives of both project
management teams have been requested to provide a 15 minute update on January 12,
2017 on the following questions:
1. What is the status of public ownership or participation?
2. What is the status of support/approval for project source water
prior to exhausting all alternatives for sub surface intake as required by
the CCC, SWRCB and CPUC?
3. What is the CEQA/NEPA status and timeline?
4. What is status of discussions with state/local permitting agencies?
5. What is the overall schedule for delivery of water to end user?
6. New information/developments pertinent to the project?
Additional information about Deep Water Desal and People's Moss Landing can be
found
on
the
project
web
sites
at
www.deepwaterdesal.com
and
www.thepeopleswater.com, respectively.
ATTACHMENTS:
None

06/12

Monterey Peninsula Regional Water Authority

Agenda Report

FROM:

Date: January 12, 2017

Item No: 6.

Executive Director Cullem

SUBJECT: Receive an Update on the Summary Project Schedule for the Monterey
Peninsula Water Supply Project (MPWSP) and Status of Test Well
Operation and Pipeline Construction
RECOMMENDATION:
It is recommended that the Water Authority Board receive a report from Cal Am on the
latest "Summary" MPWSP schedule and on the status of the test well operation and
progress on the pipeline construction.
DISCUSSION:
Cal Am will provide the most recent Summary MPWSP schedule and discuss the status
of the test slant well and of the transfer pipeline construction.
Note that regular updates on the MPWSP is available at Cal Am's project web site:
www.watersupplyproject.org .
ATTACHMENTS:
None

06/12